Britain’s biggest bank, HSBC, plays a pivotal role in the world drug and arms trades, in bribery, embezzlement and tax avoidance. Herve Falciani worked as an IT engineer for HSBC’s Swiss subsidiary in Geneva. In 2008 he stole information on 30,000 accounts. Falciani described the secret stash: ‘This money comes from mafia, drug traffickers, blood diamonds and tax evasion. Once known, no one, and I’m talking about governments, were motivated to do anything, even when it was possible. We had over $500bn in assets that were not supposed to be there.’ Falciani was arrested in France in January 2009 and handed the files to the French finance minister, now head of the IMF, Christine Lagarde. On the ‘Lagarde list’, as it has become known, royalty mingled with sports stars, East European bankers with cycling dopers, Conservative Party donors with Middle Eastern defence ministers; all manner of wealthy customers of the world’s local bank - and all with something to hide. Identities were disguised: names include Captain Kirk, Painter, Captain Haddock and a Mr Shaw.

Falciani said that he and the French authorities agreed to cooperate with other national tax bodies but that while those of Spain, Belgium and the US took this offer up, the British did not. HSBC is facing criminal investigations and charges in France, Belgium, the US and Argentina, but not in Britain. On 18 February Swiss prosecutors raided HSBC’s Swiss offices, ‘This is the first time there has been such a public investigation’, said one Swiss professor. ‘We are looking for everything and anything we can find – documents and files’, the Swiss prosecutor explained. Falciani has been appointed as tax advisor to Podemos in Spain.

Through the ingenuity of HSBC, bank managers can become accomplices of the dealer on the estate; street crime is inserted into the profits of international finance. ‘In France, an HSBC manager…was able to run a cash pipeline in which plastic bags full of currency from the sale of marijuana to immigrants in the Paris suburbs were collected. The cash was taken round to HSBC’s respectable clients in the French capital. Bank accounts back in Switzerland were manipulated to reimburse the drug dealers,’ (The Guardian 9 February 2015).

If measured by assets owned, HSBC was the world’s second biggest bank in 2014, after the Industrial and Commercial Bank of China; HSBC’s assets amounted to $2.664 trillion compared to the UK’s gross domestic product of $2.621 trillion. This amount of money means lots of power and influence. HSBC employs 254,000 people.

The bank was formed by British merchants in 1865 from proceeds of the opium and tea trades. By the late 19th century the Hong Kong and Shanghai Banking Corporation (HSBC) was Britain’s leading bank in the Far East, it was banker to the colonial government in Hong Kong, chief source of foreign loans to the Chinese government and, in partnership with the Foreign Office, devised British policy in the region. British government ministers were shareholders in the bank. One of its founders, Sir Thomas Sutherland, became MP for Greenock. By 1900 the bank had become an institution for ‘changing young gentlemen into bank clerks’. Through mergers and takeovers the bank moved in to the Middle East and US. In 1999 HSBC bought what became its Swiss subsidiary. It was fined $1.9bn in 2012 in the US for laundering Mexican drug cartel money and breaking US sanctions on Iran. In 2014 HSBC paid US and British regulators $618m for attempting to manipulate foreign exchange rates and is still under investigation for currency market rigging.

In 2005 when the European Union and Switzerland introduced new rules to tackle secret offshore accounts and tax dodging, HSBC contacted selected clients and advised them on how they could avoid the consequences of the rules. Among those to benefit from HSBC’s expertise was Stanley (now Lord) Fink. Fink amassed a fortune of £180m through financial speculation with the hedge fund Man Group. He has given some £3m to the Conservative Party since David Cameron became its leader and served as its co-treasurer from 2009. Fink has 11 directorships, properties in London, France and Spain and a 60% stake in three luxury Alpine hotels; he ‘now enjoys helicopter lifts up mountains in Italy to tackle challenging runs’, (Financial Times). When confronted with disclosures about his HSBC Swiss account, Baron Fink of Northwood remarked that ‘everyone does tax avoidance at some level’ and that his own tax arrangements were ‘vanilla’ and ‘mild’. Dozens of such characters litter the Lagarde list, parasites wallowing in wealth. They include Zac Goldsmith, Conservative MP for Richmond Park, who reportedly inherited between £200m and £300m from his father's reported £1.2bn fortune. Another is the Conservative peer Lord Sterling. In 2010 Sterling suggested that cruise passengers using his company, Swan Hellenic, at Portsmouth should not mix with 'ordinary' ferry passengers who were mostly 'semi-lager-louts' or 'lorry drivers smelling of BO'. ‘Excess and immoderation become its true standard,’ wrote Marx on capitalist accumulation of money.

Too big to fail, too big to jail

The scope of HSBC’s reach into public life in Britain is enormous and makes a mockery of claims to democracy and accountability. Her Majesty’s Revenue and Customs (HMRC) received the files on the HSBC Swiss accounts in 2010. In 2011 the head of tax at HMRC, David Hartnett, told MPs on the Treasury select committee that HMRC had received a disc with 6,000 names ‘all ripe for investigation’. The following year Hartnett resigned from HMRC and took up a position with HSBC. So far HMRC has brought just one prosecution to court over HSBC-arranged tax dodging. From 2003 until 2010 Stephen Green, salary over £25m a year, served as chief executive and then chair of HSBC. He resigned from HSBC in 2010 to become Baron Green of Hurstpierpoint and was appointed Minister of State for Trade and Investment in 2011. HMRC was asked to vet Lord Green for his suitability to be a government minister, it did not tell the government about HSBC’s engagement in tax evasion, although it had thousands of files confirming this, and Lord Green was not asked whether he had any knowledge of the crooked scheme.

On 17 February 2015, Peter Oborne announced that he had resigned from the Daily Telegraph where he was its chief political commentator. Oborne recounts that in 2012 the Telegraph ran six investigative articles on HSBC accounts in Jersey, consequently ‘HSBC suspended its advertising with the Telegraph…HSBC, as one former Telegraph executive told me, is “the advertiser you literally cannot afford to offend”’. Of the latest scandal to hit HSBC, Oborne says: ‘You needed a microscope to find the Telegraph coverage.’ Oborne describes journalists’ emails deleted, reports and documents destroyed, all relating to HSBC. He laments the ‘collapse in standards’ and concludes, ‘There are great issues here. They go to the heart of our democracy, and can no longer be ignored.’ Oborne’s resignation offers a glimpse into the real nature of the ruling class media and news in Britain: it is hired and bought. What else are we not told about HSBC and the rest of the financial gang? Most journalists understand what their paymasters want and are willing to do what they are hired for, with no questions asked. Oborne’s elevation and status no doubt deluded him with notions of self-importance and public service, but the power resides with money, not with journalistic celebrity.

Following the latest HSBC scandal Labour Party leader Ed Miliband accused David Cameron of being ‘a dodgy prime minister’ and promised a tax evasion clampdown in its first finance bill if Labour is elected to government. In 1994 Shadow Chancellor Gordon Brown denounced those who exploited tax loopholes as a ‘something for nothing elite’ and the ‘undeserving rich’. Brown said a new Labour government would ‘take action against the tax abuses and avoidance’. What happened? In 2005 Brown told the Confederation of British Industry annual dinner that regulation would be ‘not just a light touch but a limited touch’ applying to ‘the regulation of financial services and indeed the administration of tax’. One of those with an account at HSBC in Switzerland is a Saudi prince and arms dealer. In 2006 when Britain’s Serious Fraud Office attempted to investigate BAE Systems’ slush funds and to access accounts which might prove bribery of Saudi officials, Labour Prime Minister Tony Blair ordered the investigation shut on grounds of national security.

What worries the City and the British ruling class is not what HSBC has done but that it has been caught out. The Director General of the National Crime Agency warned that ‘many hundreds of billions of pounds of criminal assets’ are being laundered through the City of London. This posed a threat to national security and the economy, he said, because of the damage being done to the reputation of the City. What the ruling class fears is that HSBC has given rival centres of financial power a means of challenging the City’s global role.

It would be hard to better the assessment of Alan Hinnrichs of Dundee on the letters’ page of The Independent:‘This is not a system that can be reformed. Its rampant criminality is not the result of “bad apples”. Illegality and corruption are intrinsic to the system. The multimillionaire financiers, rather than being feted as economic titans, deserve to be frog-marched to prison.’

The US and European Union (EU) attempt to subordinate Russia continues. In this context the collapse in world oil prices is being used to try to bring Russia to its knees; it may also accelerate the descent into war. Russia is largely dependent on oil and gas exports. Oil sold at $115 a barrel in June 2014 but on 26 January 2015 it was selling at under $50 a barrel, a fall of over 55%. As oil prices dropped so the Russian rouble has fallen by 42% against the US dollar. Russian President Putin reacted: ‘We all see the lowering of oil prices. There’s a lot of talk about what’s causing it. Could it be an agreement between the US and Saudi Arabia to punish Iran and affect the economies of Russia and Venezuela? It could.’ Trevor Rayne reports.

Full of self-importance after his jaunt to the G20 meeting of world leaders in Brisbane Australia, the British Prime Minister, David Cameron, declared in an article in The Guardian (17 November 2014) that ‘red warning lights are once again flashing on the dashboard of the global economy’. He pointed to the eurozone on the brink of a third recession, the slowing of growth in the emerging market economies, the stalling of global trade talks, the Ebola epidemic and the escalating conflicts in Ukraine and the Middle East as ‘all adding a dangerous backdrop of instability and uncertainty’. He contrasted this to the British economy which, he said, is the fastest growing in the G7 major capitalist countries, with record numbers of new businesses and the largest ever annual fall in unemployment. But Cameron, preparing his excuses well in advance of the coming General Election, warned that ‘in our interconnected world’ these wider problems in the global economy ‘pose a real risk to our recovery at home’. David Yaffe reports.